backorder processing with sap r/3 vs. sap apo global available-to-promise

Backorder Processing with SAP R/3 vs. SAP APO Global Available-to-Promise

Patti KimlerProduct ManagerPTU ApplicationsSAP Labs, LLC

SAP AG 2005, 2

What We’ll Cover …

What is Backorder Processing and what should it do?

SAP APO’s Backorder Processing

R/3’s Backorder Processing

Let’s look at them both now – SAP APO vs. R/3

The gaps – Where R/3 falls short

What’s new in Global Available-to-Promise and coming up soon

Key takeaways

SAP AG 2005, 3








Key takeaways

SAP AG 2005, 4

Backorder Processing (BOP) – the Basics

When is an order a backorder? When a schedule line doesn’t have a confirmed quantity

What should a backorder processing solution do? Simulate results Lend visibility to the situation Run in a reasonable amount of time Allow selection of orders based on business requirements Allocate product in a prioritized way Allow results to be sorted in a meaningful way

Note that both solutions — R/3 and SAP APO — can satisfy all these items, to some extent

SAP AG 2005, 5








Key takeaways

SAP AG 2005, 6

Prerequisites

ATP check for orders in question must be set to take place in APO

R/3, mySAP ERP, or SAP CRM as an order management system

What does that mean?!

Typically, in the setup of Global Available-to-Promise (gATP), you specify (once) in the SAP APO Core Interface (CIF) that you want your ATP customizing settings transferred from R/3 (or mySAP ERP) to SAP APO

Then, in another integration model of the CIF, you must have selected the ATP check switch for the materials you have specified in that integration model

SAP AG 2005, 7

Core Interface Settings – Integration Models

SAP AG 2005, 8

R/3R/3R/R/22

SAP R/2 Real-time Integration International Mainframe

SAP R/3 Standardized

business processes

Client-server Distributed

processing

mySAP ERP Real-time business Powered by SAP NetWeaver Enterprise Services Architecture

mySAP ERP and mySAP Business Suite

Revolutio

n

mySAP SCM

mySAP PLM

mySAP SRM

mySAP CRM

mySAP ERP

SAP NetWeaver

mySAP Business Suite

Evolution

20001972 1979 . . . 1992 2003

SAP AG 2005, 9

SellMake MoveBuy Service

mySAP ERP

PLM SRM SCM CRM

Business Information Warehouse & SEM

SAP Enterprise Portal

Supply Chain Event Monitoring SCEM

TPVS

EWM

SPP

RR

Design

mySAP Business Suite

Strategy- Product Innovation Value Based Initiatives

< Time to Market > Product Quality $ > Life Cycle Product $ > Collaboration

ROI < 20% Development $ < 21% Scrap & Rework < 7% Manufacturing $ < 20% Warranty

Strategy- SRM, Global Visibility Value Based Initiatives

< Supplier Consolidation < Material Consolidation < Maverick Spending > Collaboration

ROI < 5-15% Material Cost > Productivity 20-30%

Strategy- Operational Excellence Value Based Initiatives

< Inventory > Customer Service > Global Resource Mgmt. > Operational Efficiency

ROI < 10-30% Inventory > Rev.-Customer Service < Planning Cycles- Days

Strategy- Customer Intimacy Value Based Initiatives

> Revenue > Market Share > Profitability > Customer Satisfaction

ROI > 2-3% Market share- AMR > Margins-5%>25%- Bain > Selling Efficiency-$10>1 > Customer Satisfaction

SAP AG 2005, 10

Where SAP APO Fits in SAP SCM

SAP Advanced Planning and Optimization(SAP APO 4.1)

SAP Inventory Collaboration Hub (SAP ICH 4.1)

SAP Event Management (SAP EM 4.1)

SAP NetWeaver (Web AS, BW, …) (SAP NetWeaver ‘04)

SAP AG 2005, 11

mySAP SCM• SAP APO 3.1

Industry Release

• Supply Chain Event Management 1.1

• CRM SCMintegration

Evolution of SAP SCM Functionality

SAP SCOPEInitiative• MRP II for Planning• SAP R/3 MM/PP• Transportation Mgmt.• Warehouse Mgmt.• Partnership with

ILOG

SAP APO 2.0• Collaborative

Planning

• Collaborative scenarios

• SAP APO available in mySAP.com

mySAP SCM• ASCN vision

announced

• SAP is market leader in Q2

• Strategic partnership with MIT Auto ID Center

20001997 1998 1999 20022001 2003 2004

SAP SCM 4.0• SAP APO 4.0• SAP ICH 4.0• SAP EM 4.0• SAP NetWeaver

integration• RFID pilots for Metro

Store and P&G

SAP APO 1.1 • SAP enters APS

market with stand-alone solution

• Decentralized warehouse mgmt. system

mySAP SCM• SAP APO 3.0 SCM

Content Workplace

• SAP LES R/3 4.6 C

• Transportation Planning

• Radio frequency

SAP SCM 4.1• SAP APO 4.1• SAP ICH 4.1• SAP EM 4.1• SAP NetWeaver

Integration• RFID-enabled SCM

DefaultSAP SCM

release

SAP SCM releasein ramp-up since June 2004

SAP AG 2005, 12

Global ATP – The Technical Perspective

SAP AG 2005, 13

Key Capabilities

Multiple Operating Modes Batch Interactive Simulative

Filter

Sorter

Support for Product Allocations

SAP AG 2005, 14

Batch Backorder Processing

2 modes:

Direct update of batch backorder processing

BOP runs and immediately updates the results to the database without an intermediate step

Batch backorder processing with postprocessing

BOP runs, saves the results to a buffer, and protects the assigned quantities with temporary quantity assignments

The results can be updated or rejected. If rejected, the temporary quantity assignments are deleted

SAP AG 2005, 15

Interactive Backorder Processing

Similar to batch backorder processing with postprocessing, except for the addition of a pre-configured worklist

It can be accessed directly from the menu structure within SAP APO, or used as a postprocessing function of Batch backorder processing

Filters and sorts are available to both operating modes

SAP AG 2005, 16

Interactive Backorder Processing – With a Worklist

SAP AG 2005, 17

Interactive Backorder Processing – Without a Worklist

SAP AG 2005, 18

Simulative Backorder Processing

No temporary quantity assignments are written to liveCache

No orders are updated in R/3

The results can be viewed in a log but cannot be updated interactively

The results can be saved in the buffer or deleted

SAP AG 2005, 19

Filter

Plus a Userexit!

SAP AG 2005, 20

Sorter

Plus a Userexit!

SAP AG 2005, 21

Product Allocations and Backorder Processing

As of SAP SCM release 4.1 (currently in Phase II Ramp-Up), product allocations may be checked as part of backorder processing

In prior releases, product allocations are neither checked nor updated

Also as part of release 4.1, if product allocations are checked by BOP, a new icon will display on the results screen telling you that this occurred

SAP AG 2005, 22








Key takeaways

SAP AG 2005, 23

Prerequisites

ATP check must be set to occur in R/3

What does that mean?!

You’re using R/3 and not APO for ATP checks

SAP AG 2005, 24

The Selection Screen

Selection

Sort

SAP AG 2005, 25

The Results

SAP AG 2005, 26








Key takeaways

SAP AG 2005, 27

Comparison

APO Redistribution flag

Redistribution for each basic method

Filter has 28 fields plus userexit

Sorter has 25 fields plus userexit

Able to confirm new results with old prior to database commit

R/3 and mySAP ERP No redistribution flag – releases

all orders’ assigned quantities, then rechecks them if they didn’t have a check before

No redistribution

Fixed filter with <10 fields

Fixed sorter

Changes are committed to database with no comparison

SAP AG 2005, 28

Comparison (cont.)

APO

Schedule line check available for all documents

Date configuration – material availability or goods Issue

Possible to preserve the lesser quantity that has been agreed upon without giving more

Possible to improve and not degrade confirmations

R/3 and mySAP ERP

Schedule line checks for stock transport orders only

Date configuration – No option (material availability date is used)

R/3 and mySAP ERP do not differentiate between confirmed quantity and requested quantity

No opportunity to preserve what was done previously

SAP AG 2005, 29








Key takeaways

SAP AG 2005, 30

The Highlights

R/3 and mySAP ERP have limited sort and filter fields With no user exits available to expand the selection

R/3 and mySAP ERP are not as flexible as mySAP SCM Dates aren’t configurable Operating modes are selectable Schedule line checks are limited to one document type

No way to preserve previous check Orders are opened, quantities are released, check is redone

No new development taking place

SAP AG 2005, 31








Key takeaways

SAP AG 2005, 32

SCM 4.1 – gATP Developments

Better support for time zones

Usability of ATP Configurable rules-based ATP results screen

Usability of Backorder Processing Enhanced usability Better icons to explain what occurred Correct and reject individual orders Improved links from the results display

Product Allocations Link to TP/VS added in 4.0

SAP AG 2005, 33

... It’s HUGE!(my boss said I should keep saying that, to get everyone ready for it)

But SCM 5.0 Is Coming, and …

SAP AG 2005, 34

gATP Highlights in SCM 5.0

Temporary facility closure A hurricane just hit my Florida distribution center

Alternate locations to use when a primary facility is closed Ship out of Texas and Georgia instead

Maximum numbers of substitutions in RBA Locations and location products, not products

Consolidation I’d like to take all these orders sourced from different

locations and consolidate them at this single location before I ship them to the customer

Drop ships/Third party I’d like the vendor to deliver this to the customer

SAP AG 2005, 35

gATP Highlights in SCM 5.0 – More!

RBA in Stock Transport Orders (not location, just product substitution) The product you requested is not available,

substitute another

Reassignment of order confirmations I’d like to borrow from Peter to pay Paul, automatically,

not manually, based on criteria that I specify

Event-driven backorder processing I’ve just gotten stock in and I want to allocate it to a

group of high-priority orders that are waiting for it

This is not a complete list

SAP AG 2005, 36

Event-Driven Backorder Processing?!

Uses something new called the Order Due List, which is also used by reassignment of order confirmations

Uses Workflow

Allows an event, like a stock receipt or a return order, to trigger a run of BOP against the Order Due List

The Order Due List will contain your highest priority, unconfirmed orders

Brilliant!

SAP AG 2005, 37

How to Decide?

If R/3 or mySAP ERP’s ATP functionality just isn’t enough of a solution anymore, consider the APO gATP solution in mySAP SCM. However, don’t wait for SCM 5.0! (Remember, it’s HUGE)

Prioritize what you need and figure out what release it’s in SCM release notes are posted on http://help.sap.com/

How many APO releases back are you? If you’re on APO 3.0 or 3.1, consider upgrading now to at least

4.0, if not 4.1 Why? Chances are there’s a lot in 5.0 that you’ll want to roll-out,

and it’ll be a smaller bite if you’re not tackling all the interim releases before you can get to 5.0

Also, 4.0 and 4.1 are smaller releases from a gATP perspective (Remember, 5.0 is HUGE)

http://help.sap.com/

SAP AG 2005, 38








Key takeaways

SAP AG 2005, 39

Key Takeaways

The BOP program you use is dependent on the system in which your ATP check takes place

APO’s Backorder Processing has more Sort and Filter options than R/3 or mySAP ERP, with user exits to add even more fields

APO’s BOP is scalable – no need to do a full run every time

With any BOP solution, force it to do what you really need it to do. Use variants, etc., to tailor your BOP runs

If R/3’s ATP solution just isn’t a solution for you, and you’ve already got all or part of mySAP SCM in place (i.e. APO DP), consider implementing gATP and attaining the benefit of the BOP program, among other things

Never assume that the product as it is today is the product that you’ll be using tomorrow. New enhancements and opportunities are always right around the corner

It is possible to implement BOP without an ATP check in the order, and there are successful implementations that have done it!

SAP AG 2005, 40

Your Turn!

Questions?

SAP AG 2005, 41

Patti KimlerProduct Manager SCM

PTU ApplicationsSAP Labs, LLCM 386-334-4756

HO [email protected]

To Contact the Speaker

backorder processing with sap r/3 vs. sap apo global available-to-promise

Documents

sap r3

sap crm

sap apothen

optimization sap apo

sap apo fits

sap apo global available

sap event management

customer satisfaction